Real Estate Matters: The politics of charging Mom rent

Published 6:20 pm, Friday, January 4, 2013

Q: Recently, a caller to your radio show asked whether she should pay off the mortgage on the condominium she owns. She said she had bought it because of her mother's emotional connection with the property. The mother is 59 and paying rent to the daughter. From the way the caller related the details of her situation, I think she already knew that the financially prudent thing to do is to pay off the mortgage — and that is what you suggested.

What was not discussed was the great likelihood that, once the mortgage was paid off, the mother would stop paying rent. I'm sorry, but I really think this is an issue that needs to be considered.

Homes & Real Estate Channel

My own mother did something similar to my sister. As long as the mother thinks the rent is “needed,” she will continue to pay it. If the mother thinks the rent she pays is only enriching the daughter, she might consider the payment as optional.

The caller indicated that the mother used emotion to get the property she wanted over the more rational thoughts of the daughter. So it might be worth considering keeping the mortgage in order to continue the cash flow. Otherwise, the daughter will be out of luck.

After all, what kind of daughter would evict a parent for nonpayment?

A: This is an interesting point that we hadn't considered — and since it happened to your sister, we know that it has probably happened to other folks as well.

In the case of the caller, she pays the monthly mortgage payment, taxes and insurance on the property, and her mom simply hands over rent. Whether the daughter decides to keep charging her mother rent once the property is paid off is another matter.

One option is to keep the mother completely in the dark about whether or not there is a mortgage. This might not be the best thing to do, but it could be the one of the better options.

While we might say that honesty is the best policy, especially among family, each person must determine what is best for him or her depending on family history. In this case, considering the relationship between the parties, the daughter could be better off remaining silent on the issue of money, just to be sure, especially if there is a family history of financial problems.

Now, to your last question: What kind of daughter kicks out her mother for nonpayment of rent?

We think if a mother reneges on her agreement to pay rent each month, and it puts the daughter in a tough spot financially, then another kind of conversation has to take place — one that might include finding somewhere else to live.

Thanks for listening and for your input.

If you have questions, you can call Ilyce Glink's radio show toll-free 800-972-8255 any Sunday, from 10 a.m.-noon, or contact her or Samuel Tamkin through her website, www.thinkglink.com.